FRANKFORT, Ky. (AP) -- Gov. Steve Beshear urged lawmakers on Tuesday to legalize slot machines at Kentucky horse tracks as a way to stave off massive budget cuts and potential layoffs of state workers.
Lawmakers could generate $780 million for state government over two years by allowing the tracks to install video slot machines, Beshear told reporters before addressing a joint session of the House and Senate on Tuesday evening.
The proposal has proven divisive in the past in Kentucky, a state where political leaders historically have frowned on casino-style gambling despite a long history of wagering on horse races, lotteries and charitable games like bingo.
Though the proposal appears to face long odds, Beshear contends it is a sensible means of resolving the state's financial woes and he challenged lawmakers to approve it.
"It requires some courage," Beshear said. "I'm hopeful they will demonstrate that courage."
Beshear said his budget proposal includes no tax increases for fear they could push Kentucky's economy further into recession.
Without the revenue from slots, Beshear said state government would face cuts of more than 12 percent over the first year of the two-year budget proposal and 34 percent in the second year. That's in addition to 20 percent to 25 percent cuts already made in many state agencies.
"Cuts of this magnitude would undoubtedly lead to mass layoffs and would inflict devastating damage on literally hundreds of critical services to communities and individuals around the commonwealth," Beshear said.
Under the governor's budget proposal, gambling revenues would help the maintain current funding levels for job creation, health care, public safety and education programs.
The governor also said he remains hopeful that Congress might approve a second round of funding to help states like Kentucky balance their budgets. If that happens, Beshear said 1 percent pay raises to teachers and state employees would be among his plans for the money.
"We cannot control what happens in Washington, and thus my budget does not count on that money," he said.
Among spending initiatives included in the voluminous budget bill, Beshear proposed $1.5 billion in general fund bonds for construction projects that he said will create jobs for Kentuckians. He also proposed $300 million for additional highway construction projects and $129 million in general fund bonds to construct a new Eastern State Hospital for the mentally ill to replace the existing facility that predates the Civil War.
Besides gambling revenues, Beshear also proposed a variety of maneuvers, including fund transfers, debt restructuring and spending cuts to balance the budget. House Appropriations and Revenue Committee Chairman Rick Rand, D-Bedford, said he intends to file the governor's budget bill Wednesday.
House Speaker Greg Stumbo, D-Prestonsburg, said he will propose an alternative budget if Beshear is unable to win the support of enough lawmakers to pass his own.
"It will be a test of his leadership skills and his legislative skills," Stumbo said.
Senate President David Williams, R-Burkesville, predicted that the gambling proposal would doom Beshear's budget proposal.
"Ultimately, you cannot spend, tax or gamble your way to prosperity," Williams said.
Beshear called his budget proposal a conservative and responsible way to help state government weather the economic recession.
"Now what is needed is honest, thoughtful and open discussion of how to move forward," he said.
Antigambling advocates objected to Beshear's contention that gambling is a sensible option.
"Private companies and private individuals are cutting back, and there's no reason that government can't do the same thing," said Martin Cothran, spokesman for Say No To Casinos.
Cothran said he doesn't believe Beshear's proposal has enough support to pass the House or the Senate. But, if it did, Cothran said he expects a lawsuit to challenge the constitutionality of the move.
Say No To Casinos contends that the state constitution specifically forbids gambling. Beshear and other proponents disagree.
"The leaders of both chambers of the General Assembly have advised the governor not to do this," Cothran said. "He should listen to good advice."
A measure similar to Beshear's gambling proposal passed the House last year but died in the Senate.
Beshear said his latest proposal has one notable variation from last year's legislation: He is calling for the money to go into the general fund to balance the budget -- not primarily to education programs as before.
(Copyright 2010 by The Associated Press. All Rights Reserved.)